India’s stock market indices, Sensex and Nifty have closed in the red for 15 consecutive trading sessions. However, it snapped out of the downturn on Wednesday after rising more than 300 points at the opening bell. The market commentators are yet to be convinced that the surge today can be sustained till the closing bell. Several analysts are already pointing out that Sensex could turn red during the mid-hours and add to a 16th-day slump.

Also Read: Micron, AMD, Nvidia Slide Amid AI Slowdown Fears: What’s Next?

What Caused India’s Stock Market to Slump This Long?

narendra modi prime minister india summit flags
Source: The Canadian Press / AP, Matias Delacroix

Just 15 days ago, the government of India published highly debated data showing that the country has recorded a growth of 7.8% in annual GDP. The country was divided, and some even accused the government of providing inaccurate data. Commentators explained that none of the 7.8% economic growth claimed by the government has benefited the common man. Day-to-day prices are skyrocketing, with graduates unable to find new jobs, among others. The skeptical development also led to India’s stock market kick-starting a negative run.

This also coincided with rising oil prices as they touched $108 per barrel. It led to a cocktail of disasters, adding further strain to India’s stock market. Nifty has fallen to its May 2024 lows and has given negative returns in the last two years. The development is testing the mettle of investors, with the majority of them seeing losses. While calls of ‘buy the dip’ are growing louder, an influx of new money is hesitant to take an entry position. Adding to their worries, the rupee also touched a low of 96 on Tuesday.

India’s stock market is in a difficult position, as foreign investors are fleeing for better opportunities abroad. The increased taxation on STCG and LTCG has also dampened the mood of the markets. Investors have been urging the government to recall the increased taxes, but are being met with deaf ears. The road ahead for Sensex and Nifty could be a rough one in the coming months.

Read Original Source
Markets Regulation